Law Commons^™

Regulating Impartiality In Agency Adjudication, Kent H. Barnett

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Which should prevail—the Take Care Clause of Article II or the Due Process Clause? To Justice Breyer’s chagrin, the majorities in Lucia v. SEC and Free Enterprise Fund v. PCAOB expressly declined to resolve whether the U.S. Constitution condones SEC administrative law judges’ and other similarly situated agency adjudicators’ current statutory protection from at-will removal. The crux of the problem is that, on one hand, senior officials may use at-will removal to pressure agency adjudicators and thereby potentially imperil the impartiality that due process requires. On the other hand, Article II limits Congress’s ability to cocoon executive officers, including potentially …

Saturns For Rickshaws: Lessons For Consumer Arbitration And Access To Justice, Peter B. Rutledge

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Companies are increasingly requiring consumers to agree to arbitrate disputes they may have over the products or services they purchase. Pre-dispute arbitration agreements are controversial especially for consumer disputes, where, it is feared, consumers will not represent themselves and neither will lawyers come forward because of the small stakes involved in individual claims. Dean Rutledge addresses in this chapter whether consumer arbitration processes can be designed to provide greater access to justice for consumers.

The Testamentary Foundations Of Commercial Arbitration, Peter B. Rutledge

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This Article offers the first systematic treatment of the relationship between commercial arbitration and testamentary arbitration. (By testamentary arbitration, I mean an arbitration clause contained in a will requiring beneficiaries to resolve differences over the estate by means of an enforceable decision by a private party rather than judicial resolution in a probate court.) Recent scholarship and jurisprudence have questioned the enforceability of these arrangements as incompatible with the requirement of a written "agreement" between parties to the arbitration. Contrary to these views, close examination of the historical record of testamentary arbitration leading to the Federal Arbitration Act's enactment reveals …

Reconceptualizing Non-Article Iii Tribunals, Jaime Dodge

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The Supreme Court’s Article III doctrine is built upon an explicit assumption that Article III must accommodate non-Article III tribunals in order to allow Congress to “innovate” by creating new procedural structures to further its substantive regulatory goals. In this Article, I challenge that fundamental assumption. I argue that each of the types of non-Article III innovation and the underlying procedural goals cited by the Court can be obtained through our Article III courts. The Article then demonstrates that these are not theoretical or hypothetical solutions, but instead are existing structures already in place within Article III. Demonstrating that the …

"Sticky" Arbitration Clauses? The Use Of Arbitration Clauses After Concepcion And Amex, Peter B. Rutledge, Christopher R. Drahozal

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We present the results of the first empirical study of the extent to which businesses have switched to arbitration after AT&T Mobility LLC v. Concepcion. After the Supreme Court’s decision in Concepcion, commentators predicted that every business soon would use an arbitration clause, coupled with a class arbitration waiver, in their standard form contracts to avoid the risk of class actions. We examine two samples of franchise agreements: one sample in which we track changes in arbitration clauses since 1999, and a broader sample focusing on changes since 2011, immediately before Concepcion was decided. Our central finding is consistent across …

“Sticky” Arbitration Clauses? The Use Of Arbitration Clauses After Concepcion And Amex, Peter B. Rutledge, Christopher R. Drahozal

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We present the results of the first empirical study of the extent to which businesses have switched to arbitration after AT&T Mobility LLC v. Concepcion. The Supreme Court’s decision in Concepcion led commentators to predict that every business soon would use an arbitration clause, coupled with a class arbitration waiver, in their standard form contracts to avoid the risk of class actions. We examine two samples of franchise agreements: one sample in which we track changes in arbitration clauses since 1999, and a broader sample focusing on changes since 2011, immediately before Concepcion was decided. Our central finding is consistent …

Disaggregative Mechanisms: The New Frontier Of Mass-Claims Resolution Without Class Actions, Jaime Dodge

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Aggregation has long been viewed as the primary if not sole vehicle for mass claims resolution. For a half-century, scholars have consistently viewed the consolidated litigation of similar claims through joinder, class actions and more recently multi-district litigation as the only mechanism for efficiently resolving mass claims. In this Article, I challenge that long-standing and fundamental conception. The Article seeks to reconceptualize our understanding of mass claims resolution, arguing that we are witnessing the birth of a second, unexplored branch of mass claims resolution mechanisms — which I term “disaggregative” dispute resolution systems because they lack the traditional aggregation of …

Adequately Representing Groups, Elizabeth Chamblee Burch

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Adequate representation and preclusion depend on whether the courts treat a litigant as part of a group experiencing an aggregate harm or as a distinct person suffering individual injuries. And though a vast literature about adequate representation exists in the class-action context, it thins dramatically when contemplating other forms of group litigation, such as parens patriae actions and multidistrict litigation. As class actions have gradually fallen into disfavor and attorneys and commentators seek alternative means for resolving group harms, the relative clarity of Rule 23 wanes. How should courts evaluate adequate representation in parens patriae actions and in multidistrict litigation? …

Contract And Choice, Peter B. Rutledge, Christopher R. Drahozal

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This Article contributes to an ongoing debate, afoot in academic, legal, and policy circles, over the future of consumer arbitration. Utilizing a newly available database of credit card agreements, the Article offers an in-depth examination of dispute resolution practices within the credit card industry. In some respects, the data cast doubt on the conventional wisdom about the pervasiveness of arbitration clauses in consumer contracts and the presence of unfair terms. For example, the vast majority of credit card issuers do not utilize arbitration clauses, and by the end of 201 0, the majority of credit card debt was not subject …

Who Owes How Much? Developments In Apportionment And Joint And Several Liability Under O.C.G.A. § 51-12-33, Thomas A. Eaton

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Without question, O.C.G.A. 51-12-13 as construed in McReynolds and Couch ushers in a new era in Georgia tort law. It topples the old regime in which multiple tortfeasors were held jointly liable when their combined acts of negligence injured an innocent plaintiff. The new regime is one of apportionment and liability limited to one's personal share of fault. Fault may be apportioned when it previously could not. It may be apportioned to those who are immune, to those who are unknown, and even to those who intentionally injure an innocent plaintiff. The practical consequence of this regime change is to …

Trips And Bits: An Essay On Compulsory Licenses, Expropriation, And International Arbitration, Peter B. Rutledge

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This essay examines the potential for arbitration to resolve disputes between private companies and developing countries over the propriety of compulsory licenses. At bottom, my thesis is that arbitration supplies the medium through which to mediate the tension between the profit-seeking goals of private multinational companies and the development goals of foreign nations, especially in the developing world. The compulsory license debate raises a clash of fundamental interests between the patent holder, the patent holder’s state, and the host state. Arbitration can play an important role in balancing those interests, albeit a highly unusual one. Arbitration provides an essential forum …

Convergence And Divergence In International Dispute Resolution Symposium, Peter B. Rutledge

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Drawing on the literature, two strands help to frame this paper. The first concerns why parties choose to arbitrate. The second strand is the literature documenting the efforts within the arbitration industry to encourage the use of arbitraments.

My goal in this paper is to bridge a gap between this second strand and the first, more theoretical strand. What is missing from both strands is a concrete, system-wide understanding about why parties opt for arbitration as opposed to other forms of dispute resolution. In other words, I seek both to give concrete understanding to the theoretical model articulated in the …

Contract And Procedure, Peter B. Rutledge, Christopher R, Drahozal

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This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties' ability to regulate procedure by contract (at issue in the Supreme Court's recent Rent-A-Center decision) and …

The Limits Of Procedural Private Ordering, Jaime L. Dodge

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Civil procedure is traditionally conceived of as a body of publicly-set rules, with limited carve-outs – most commonly, forum selection and choice of law provisions. I argue that these terms are mere instantiations of a broader, unified phenomenon of procedural private ordering, in which civil procedure is no longer irrevocably defined by law, but instead is a mere default that can be waived or modified by contract. Parties are no longer merely selecting between publicly-created procedural regimes but customizing the rules of procedure to be applied by the court – from statutes of limitations, discovery obligations and the admissibility of …

Regulating Mandatory Arbitration, Thomas V. Burch

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Over the last twenty-five years, the Supreme Court has relied on party autonomy and the national policy favoring arbitration to expand the Federal Arbitration Act’s scope beyond Congress’s original intent. Choosing these loaded premises has allowed the Court to reach the outcomes it desires while denying that it is making any political or moral judgments in its decisions – a type of bureaucratic formalism. One controversial outcome of the Court’s formalism, overall, has been the increased prevalence of mandatory arbitration. Although it reduces judicial caseloads and lowers companies’ dispute-resolution costs, it also restricts or eliminates individual rights and reduces public …

Manifest Disregard And The Imperfect Procedural Justice Of Arbitration, Thomas V. Burch

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Arbitration is an efficient dispute-resolution system that respects parties’ right to an accurate award. But because arbitration is designed to be efficient, accuracy is not guaranteed. This presents a challenge when courts are asked to confirm or vacate arbitrators’ decisions. Judges dislike approving inaccurate awards, especially in cases where parties have unequal bargaining power. Yet, judges also recognize arbitration’s limited-review principle. So they are forced to balance their desire for accuracy against arbitration’s efficiency policy. Efficiency typically wins at the expense of accurate outcomes.

This Article contends that courts place too much emphasis on the efficiency policy in mandatory arbitration. …

Arbitrating Disputes Between Companies And Individuals: Lessons From Abroad, Peter B. Rutledge, Anna W. Howard

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Congress is considered changes to the Federal Arbitration Act and the central premise underlying these bills is the idea that the parties to these agreements (typically there is an individual on one side and a company on the other) tend to occupy unequal bargaining positions. The drafters of these bills conclude from this that the individual’s choice to opt into arbitration before a dispute has arisen cannot be considered free and voluntary, and thus, the arbitration agreement should be considered void and unenforceable.

Defenders of these bills claim that the United States, when compared to other nations, stands alone in …

Arbitration Reform: What We Know And What We Need To Know, Peter B. Rutledge

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The future of commercial arbitration has become a centerpiece of the domestic congressional agenda. According to one estimate, ten different bills introduced in the 110th Congress would chip away at the enforceability of pre-dispute arbitration agreements. By far the most significant bill, the Arbitration Fairness Act, would retroactively invalidate arbitration agreements in all employment, consumer, securities and franchise contracts. An especially vague provision in a prior version of the bill would invalidate agreements involving claims under statutes intended to protect civil rights or designed to regulate transactions between parties of unequal bargaining power. Are these wise moves?

Introduction: The Constitutional Law Of International Commercial Arbitration, Peter B. Rutledge

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An exceptional feature of international arbitration is the extensive and meaningful dialogue that takes places between scholars and practitioners in the field. Unlike some other disciplines where the camps appear to talk past each other, international arbitration enjoys a rich relationship between the two. Practitioners have written some of the most important scholarly works in the field, while scholars have worked on some of the most important cases. In January 2009, the University of Georgia Law School and its Dean Rusk Center were pleased to bring together an elite group of scholars and practitioners for a day-long conference on the …

The Case Against The Arbitration Fairness Act, Peter B. Rutledge

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The Arbitration Fairness Act is a well-intended but ultimately misguided attempt to address a system of dispute resolution that has largely worked well. The bill currently being considered by Congress rests on a series of flawed empirical premises. This article addresses three. First, though the bill posits that arbitration leaves consumers and employees worse off, data demonstrate individuals overall are often better off under a system with enforceable predispute arbitration agreements than a system without them. Second, although the bill promises improved access to justice, the proposal actually erects more impediments. Third, though the bill suggests that postdispute arbitration will …

Whither Arbitration?, Peter B. Rutledge

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Over the past several decades, scholars and policymakers have debated the future of arbitration in the United States. Those debates have taken on new significance in the present Congress, which is considering a variety of reform proposals. Among the most widely watched are ones that would prohibit the enforcement of predispute arbitration clauses in employment, consumer, and franchise contracts. Reviewing the available empirical literature, the paper explains how many of the assumptions driving the arbitration reform debate are unproven at best and flatly wrong at worst. It then tries to sketch out the economic impact of any move by Congress …

Arbitration And Article Iii, Peter B. Rutledge

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Does arbitration violate Article III? Despite the critical need for a coherent theory to answer this question, few commentators or courts have made serious attempts to provide one. For much of the country's history, federal courts conveniently could avoid this nettlesome question. Prior to the twentieth century, courts simply declined to enforce pre-dispute arbitration agreements as unenforceable attempts to appropriate their jurisdiction. From the early decades of the twentieth century (with the enactment of the Federal Arbitration Act (“FAA”) in 1925) through the 1960s, the non-arbitrability doctrine prevented arbitrators from resolving issues of federal statutory law. Notably, while both of …

Who Can Be Against Fairness? The Case Against The Arbitration Fairness Act, Peter B. Rutledge

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In this brief essay, I hope to lay out the case against the Arbitration Fairness Act.3 Part I of this Article addresses the “findings” on which the act is premised. It explains how in several respects the current research on arbitration flatly contradicts the premises animating those findings (in other respects, the data is incomplete, so the “findings” at best are better described as “untested hypotheses” or “assumptions”). Part II of this Article explains why postdispute arbitration is not a viable alternative to our present system of enforceable predispute arbitration clauses.

Discovery, Judicial Assistance And Arbitration: A New Tool For Cases Involving U.S. Entities?, Peter B. Rutledge

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Limited discovery is one of the regularly cited advantages of international arbitration, as opposed to international litigation, particularly in contrast to litigation in the US. courts. Recent decisions by US. courts, however, have threatened to upend this comparative advantage. Invoking a little known US. law, 28 U.S.C. section 1782, these courts have permitted parties in an arbitration to petition for subpoenas issued by US. courts against their adversaries or third parties. Bucking the trend in the academic literature, which largely supports this development, this article opposes reading section 1782 to authorize subpoenas in support of an arbitration. Not only does …

The Effect Of Forum Selection Clauses On District Courts’ Authority To Compel Arbitration, Thomas V. Burch, John W. Hinchey

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This is a short piece written for the AAA's Dispute Resolution Journal on two competing provisions in Section 4 of the FAA. One provision tells district courts to compel arbitration in accordance with the parties' agreement, including any forum selection clause. The other says that the court can compel arbitration only within its own territory. This, of course, creates a problem when the forum selection clause calls for arbitration in another jurisdiction. This short article addresses the conflict, showing how courts tend to rule on the issue (as of 2006).

Origin, Scope, And Irrevocability Of The Manifest Disregard Of The Law Doctrine: Second Circuit Views, Christian Turner, Joshua Ratner

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After arbitration has occurred, parties may seek judicial enforcement of the arbitral award, converting the private determination into an enforceable judgment. Parties that did not prevail in the arbitration may, at the same time, seek to have the arbitral award vacated. This article concerns the doctrine that permits courts to vacate an arbitral award when the arbitrators “manifestly disregarded” the law, focusing on recent developments in the Second Circuit. Despite the exceedingly deferential scope of this doctrine, the Second Circuit has actually vacated a handful of arbitrations on grounds of manifest disregard, and the doctrine is routinely raised by litigants. …

Market Solutions To Market Problems: Re-Examining Arbitral Immunity As A Solution To Unfairness In Securities Arbitration, Peter B. Rutledge

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This paper addresses the fairness of securities arbitrations in the United States. A few decades ago, such a topic would have been relegated to the academic hinterlands. For the first fifty years following the enactment of the nation's securities laws, pre-dispute arbitration agreements between investors and the securities industry were not enforceable. In a series of decisions in the late 1980s, the Supreme Court reversed course and held that such disputes were indeed arbitrable. Following those decisions, arbitration quickly became the preferred method of dispute resolution for cases arising under the nation's securities laws, especially disputes between investors and broker-dealers. …

Toward A Contractual Approach To Arbitral Immunity, Peter B. Rutledge

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This Article breaks from conventional wisdom in both case law and scholarship. It proposes a simple but novel thesis: Arbitrators and arbitral institutions, in cases of voluntary submission of disputes, should not be entitled to any form of legal immunity. Instead, any limit on or waiver of the arbitrator's or institution's liability should come in the form of a contractual release-either adopted in the parties' arbitration agreement or negotiated between the parties and the arbitrator.

Central to this thesis is a distinction between two types of immunity. The first form of immunity is “contractual immunity.” The hallmark of contractual immunity …

Necessity Never Made A Good Bargain: When Consumer Arbitration Agreements Prohibit Class Relief, Thomas V. Burch

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The American system of arbitration is constantly evolving. From the first formal arbitration tribunal in 1786—established by the New York Chamber of Commerce—to the creation of the Federal Arbitration Act in 1925—passed to suppress judicial hostility towards arbitration -- the system has continuously adapted to accommodate changing business practices and rising judicial concerns over the legitimacy of the institution. In fact, the system’s adaptation has been so effective that the Supreme Court now recognizes a “national policy favoring arbitration.” This “national policy” is the most recent phase of the arbitration evolution, and it raises several concerns. Most significantly, lower courts …

Georgia General Assembly Adopts "Manifest Disregard" As A Ground For Vacating Arbitration Awards: How Will Georgia Courts Treat The New Standard?, John W. Hinchey, Thomas V. Burch

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Generally, courts may only set aside arbitration awards on the grounds listed in the Federal Arbitration Act or the applicable state arbitration code. However, all federal circuit courts and a few state courts have adopted a non-statutory exception that allows a court to overturn an arbitrator's decision if the arbitrator has exemplified a "manifest disregard" of the law.

In 2002, after several years of tentative lower court decisions, the Georgia Supreme Court, in Progressive Data Systems v. Jefferson Holding Corporation, held that manifest disregard is not a proper ground for vacatur in Georgia. The court emphasized that Georgia's Arbitration Code …